1. Peter Hall Managing Partner Intuition International Limited

2.  Context  The Acquirer perspective  The Merchant perspective  Open Forum ▪ What is important to merchants? ▪ What are the cardholder attitudes? ▪ What are the barriers?

3.  Scale Number and mix of merchant customers / sectors  Technology Flexible, fast, absolutely reliable  Data Processing, management and analysis  Execution excellence Product specification / delivery, service, relationships

4.  Merchants want better products and service  Merchants always want lower prices  Margins are tight, scale is critical  Compliance is never ending (i.e. Scheme Rules)  Keeping up to date is expensive  Technology investment is significant  Control cannot be wholly central  You need the right people and process  Its tougher than Issuing!

5. We help merchants get more money from their customers: Efficiently Reliably Securely We do it better, cheaper, quicker than other payment forms Does that argument hold true?

6. Business AreaBest Practice StrategyATM vs. POS, Issuer influence Debit targetsDefine by opportunity and nature of product Business FitDevelop competency & edge to match targets Sales ChannelsClarify role of sales, branches & corporate banking Sales MethodDefine pro-active and reactive methods TrainingMulti level, multi channel (F-F & remote) Revenue/Pricing ModelFactor in transaction mix, risk, dispute & incentives Technology managementPOS v ECR integration, new applications: PayWave Merchant CommsBalance statement, direct mail, e-mail and web site Merchant PromotionDrive usage, offer incentives, analyse data Merchant FeedbackMarket research, mystery shopper + sales force feedback

7.  Comparison to cash  Lower value transactions  Higher transaction frequency  Loyalty to the product  Connection to necessity  Its my money  Fit to immediate consumption  Regular, habitual payments

8. Is this what you need from Issuers?

9. No need to visit an ATM Better control of finances Ability to make a reservation Pay bills on time Be safer Take advantage of promotions and rewards Faster transaction No need to write a cheque

10. Would this help?

14.  The Basics: fair price, fast payment, technology that works  Understanding my business needs  Tell me what is new: products, ideas and rules  Tell me how I could do better – don’t wait for me to ask  Provide help when I need it: reaching someone with competence/authority  Planning for change, i.e. compliance: why, how, what, when, how much?  Information: available, informative, meaningful, actionable  Self service: reporting, problem solving, FAQ, training tools  Value: performance review, matrix of penalties/ incentives

15.  Margin  Volume  Throughput  Technology  Authorisation Quality  Service Quality  Merchant/Consumer Education

17. MOST SAFE Payment on Web Unfamiliar places In places (i.e. cafés), where card is taken away ATM cash In well-known upscale shops & branded gasoline Overseas LEAST SAFE “ you can’t pay for bus tickets; or in small shops if you don’t have cash with you” “It’s complicated and takes a long time to pay with it” “Sometimes payments do not work, even when you have enough money on your card” “You can’t use it in a taxi or for movies so I always take cash”

19. The challenge Cardholder Withdraw most cash soon after being paid Unsure when, where how to use cards Cardholder Withdraw most cash soon after being paid Unsure when, where how to use cards Merchant Locations and merchants that fit Debit are limited Not convinced of card benefits Merchant Locations and merchants that fit Debit are limited Not convinced of card benefits Acquirer Merchant resistance Transaction quality Business case clarity Infrastructure Acquirer Merchant resistance Transaction quality Business case clarity Infrastructure Issuer Don’t track debit revenue Cash Cost unknown Limited marketing and inefficient returns Issuer Don’t track debit revenue Cash Cost unknown Limited marketing and inefficient returns

20. Good news:  Card spend can be 5 x higher than cash  Consumers like debit for making purchases without carrying excess cash and without having to borrow And most target merchants:  would like to reduce cash because of the risk of robbery  typically have manual acceptance processes with high labour costs However some merchants:  are reluctant to promote card acceptance because they lack confidence in POS infrastructure (Deloitte Research)

22.  New customers  New business  Higher transaction amounts  Reduced business cost  Faster payment cycle  Security  Staff safety  Payment guarantee  Management information  Access to account balance  Incremental sales  Faster throughput  Automation  International business Is the argument strong enough, or is the challenge in selling it? Business case for merchants:

23. Getting practical: Confidence & Knowledge ProblemSolution VisibilitySignage: clean, recent, prominent, available, audited Training  Toolkit, not a manual  Specific, not generic POS DeviceMaintain, update, refresh AuthorisationSpeed & reliability KnowledgeCost and risk of cash PriceEducation, promotion & performance incentives Sell benefits, not processLess risk, more business, happy customers

25.  Strategic clarity (i.e. ATM vs. POS priority)  “No brainer” business case  Solutions that fit the sectors  Plug & Play technology  Simple processes  On tap assistance  Consistent marketing messages